After multiple meetings and two public hearings, the Kyle City Council adopted its fiscal year 2026-27 budget. The $437.8 million budget addresses a $14.2 million deficit the city was facing while reducing the property tax rate.
The council has made multiple amendments to the budget since it was first presented by Interim City Manager and Finance Director Perwez Moheet on Aug. 1.
The big picture
The council approved a balanced budget with a reserve fund equal to at least 25% of the city’s operating expenses, the minimum amount required.
All essential city services, operations and maintenance are fully funded through the budget. Most of the city’s departments experienced budget cuts, except for the City Council, the attorney’s office, the manager’s office, solid waste services and the Kyle Police Department, according to previous Community Impact reporting.
“When the budget process began, we faced a very different financial picture than where we are today,” said Moheet in a news release. “Through careful planning, difficult conversations and a renewed focus on our priorities, we arrived at a balanced and achievable budget that puts our community first while continuing to invest in the infrastructure and services needed to support Kyle’s future.”
The approved budget includes a new property tax rate of $0.5460 per $100 of taxable value. The rate was reduced by $0.0497 per $100 from the previous fiscal year’s $0.5957 per $100, an 8.34% reduction.
The water, wastewater and storm drainage fees for residents living inside and outside city limits saw no increase. Residents will see a 2.5% increase in solid waste collection and recycling services, according to the release.
The adopted budget funds 460 full-time positions while eliminating 11 unfilled positions and freezing 23 positions, according to agenda documents.
Diving deeper
Throughout the budget review process, the City Council made multiple amendments, totaling approximately $3.12 million in increased operating and capital expenditures.
The council approved an amendment to the Capital Improvement Plan allocating $1,886,546 for improvements at Kyle Vista Park. On Aug. 18, council members voted to dedicate the land exclusively for park and recreation purposes, according to previous Community Impact reporting.
Council members added $57,058 to fund two part-time positions at the Kyle Public Library.
“Without this funding, library operating hours and programming would have needed to be reduced,” said Council Member Claudia Zapata in a statement.
The council added $600,000 in CIP funding for the Moreno Street Drainage Project and $398,745 for two leased police vehicles, according to agenda documents.
The final amendment made by the council added $169,467 to the budget for animal shelter services, to be provided by San Marcos.
The San Marcos Regional Animal Shelter had announced the end of all its partnerships, including with the city of Kyle, but will continue to provide services as the city develops a permanent animal shelter, according to previous Community Impact reporting.
The city had originally planned to develop a regional animal shelter at Kyle Vista Park but voted to evaluate different options after dedicating the land as parkland, according to previous Community Impact reporting.
Also of note
Zapata attempted to call for an amendment to cancel two contracts and evaluate one contract between the city and Flock for Automated License Plate Readers, or ALPRs, and Drones as First Responders, or DFRs, totaling $426,000 a year. The motion failed to get a second and was not discussed or voted on.
Two of the contracts could have been canceled by the council not appropriating funds to them in the FY 2026-27 budget, while the third contract would have required the city to continue payments, said Kyle City Attorney Aimee Alcorn-Reed.
“It angers me that we continue spending such a significant amount on AI mass surveillance in the name of public safety while children in our community navigate unsafe streets simply to get an education,” Zapata said in a statement.
The council will consider placing a non-binding referendum on the May election ballot to gauge the community’s views on the Flock contracts. The results of the referendum will not require the council to maintain or cancel any contract.
“Council can only make good decisions with full knowledge, and we don't have that full knowledge,” said Mayor Yvonne Flores-Cale. “What I need in order to make that decision is some type of presentation from the staff to explain our contracts, where we stand [and] what we are set to lose.”
